Friday, September 14, 2012

IMF Urges Ethiopia to Slow Nile Dam Project to Protect Economy

(Sept 14, 2012, Bloomberg)--Ethiopia should slow the construction of Africa’s largest hydropower plant to avoid the dam and other projects starving the rest of the economy of funds, the International Monetary Fund said. The government began work on the Grand Ethiopian Renaissance Dam, situated on the Blue Nile River near the Sudanese border, in April last year. The 80 billion-birr ($4.5 billion) project that will generate 6,000 megawatts, partly for export to the region, is scheduled to be completed in 2018.

“I think there’s a need to rethink some of those projects a little bit to make sure that they don’t absorb all domestic financing just for that project,” IMF country representative Jan Mikkelsen told reporters yesterday. “If you suck in all domestic financing to just a few projects that money will be used for this and not for normal trade and normal business.”

Ethiopia, the world’s fifth-biggest coffee producer, is seeking to diversify its economy to reduce a reliance on agriculture for 43 percent of total output. Ethiopian Electric Power Corp., the state-owned utility, began exports to neighboring Djibouti in May 2010 and plans to ship as much as 2,000 megawatts to Egypt and 1,200 megawatts to Sudan by 2020. Power exports to those nations may earn about $1.6 billion a year, according to Access Capital, the Addis Ababa-based research company.

The delayed return on investments for long-term projects increases the need to ensure they don’t absorb all domestic financing as they’re being built, Mikkelsen said.

Ethiopia’s government won’t reschedule construction of the Grand Renaissance dam, said Communications Minister Bereket Simon, who co-chairs a fundraising committee for the plant. “It was a well-considered plan and it’s one of the mega projects for which the government commits itself unconditionally,” Bereket said in a phone interview yesterday.

In the current fiscal year that ends next July, Ethiopia plans to invest 144 billion birr, about 16 percent of gross domestic product, in industrial development, transport, telecommunications, energy and housing, according to the government’s five-year growth plan. Read more from  Bloomberg »

1 comment:

Anonymous said...

What a huge investment and that even on borrowed money and that even to supply electricity to your core enemies 'Djibouti in May 2010 and plans to ship as much as 2,000 megawatts to Egypt and 1,200 megawatts to Sudan by 2020.' He had brain tumour and you are not thinking straight too.

They will never pay you for your goods. Egypt will say its agriculture income is gone sore down supply me same amount of water and the other two will have same excuses and you will have established a military union of three rogue enemies. You better develop this project for domestic needs and development of your agriculture utilizing your own citizen engaged in agriculture and take back all of your land from the foreign Muslim investors and spend the funds in building your defence and army force to with stand all Muslim state who are your enemy number one, no matter what they say in word of their mouth.

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